The World Bank says it intends to resume direct budget support to Mozambique, six years after it was suspended when more than $2.7bn (£2.1bn) of undisclosed state debts were discovered.
It became known as the tuna bond scandal as much of the money the government secretly borrowed was to set up a fishing industry, but the money was allegedly diverted to corrupt officials.
The announcement comes a day after the International Monetary Fund (IMF) made a similar pledge.
During a briefing in Washington DC, World Bank official Idah Pswarayi-Riddihough said the first trench of $300m would be up for approval by the end of June.
“We feel that this is an excellent opportunity for the government particularly to also recognise the very strong work that they have done since the hidden debts… around transparency and governance,” she said.
“The approval of the IMF programme and [the World Bank’s] budget support activities give a very strong signal to the market but even more importantly they give a strong signal to all of partners of Mozambique in terms of financing.”
She explained that this help would allow the government to create more resources for development that would also help deflect the economic impact of the Ukraine crisis and the coronavirus pandemic.
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